A new paper from Chartered Accountants Australia and New Zealand (CA ANZ) reveals the story behind Australia’s fall in global prosperity rankings.

According to The Quest for Prosperity: Shaping Australia’s Future, a joint publication from CA ANZ and the Legatum Institute, Australia is sliding down the rankings in key areas, such as the economy, the natural environment and security.

It says Australia has “strong foundations to face the future,” but it faces “significant challenges”. The paper provides a data-led analysis of prosperity in 34 countries over the past decade using nine pillars including economic quality, business environment, governance, education, health, safety and security, personal freedom, social capital and natural environment.

Overall, Australia now ranks sixth in world prosperity rankings, down from second in 2007. The fall is due to declines in performance related to economic quality, safety and security and the natural environment.

“Australia has declined because of trade barriers that have the potential
to slow foreign direct investment.” Rob Ward, CA ANZ’s Head of Leadership
and Advocacy

The Quest for Prosperity found Australia placed strongly across a range of areas, including second in the world for Social Capital, fourth for Education and eighth for Health.

The findings show Australia has been performing well, but there is room for improvement to ensure prosperity for all. This is because prosperity is much more than a financial measurement – it’s a vital indicator of a nation’s health in terms of the economy, society, industry and the environment.

Our paper shows that Australia is a world leader when it comes to social capital – the strength of personal relationships, support networks and civic participation. We’ve seen a sharp rise when it comes to the health ranking – because of investments in infrastructure and care services.

The paper identifies areas where Australia has fallen behind other nations, particularly around the economy, trade and competition. In terms of the economy – Australia has declined because of trade barriers that have the potential to slow foreign direct investment, and anti-monopoly policy that can inhibit domestic competition.

Australia has declined in safety and security because we’ve remained static – while other countries have implemented initiatives that have lowered road death tolls and reduced crime. The drop in our environmental rankings is due to the excessive exploitation of natural resources in the last decade.

We have also identified the key challenges to Australia’s ongoing prosperity and provide recommendations about how government and business can work together to ensure prosperity for all.

Clearly, Australia does very well on the world stage. We hope this paper provides a useful tool to ensure we continue to be one of the most prosperous countries in the world.